Stifel GMP has initiated coverage of HighGold (TSX-V:HIGH, OTCQX:HGGOF) Mining Inc, giving the exploration company a ‘Buy’ rating.
The broker has also placed a C$3.15 target price on HighGold (TSX-V:HIGH, OTCQX:HGGOF), saying the JT Main deposit at its Johnson Tract project in Southcentral Alaska is “the kind of deposit mining engineers dream about”.
“A more 'mineable' orebody we have rarely seen,” Stifel's analysts said in a note to clients. “The deposit sits in the mountain above the valley floor, providing low-cost adit access underground for a mine that will not require dewatering. The highest grade portions of the deposit are situated near the base allowing for a quick payback period on initial capital.”
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The Stifel analysts' noted that the flagship JT Main deposit already hosts 800,000 ounces at 9.2 grams per ton (g/t) gold equivalent and continues to expand with every drill hole. It has a target reserve of 1.35 million ounces (Moz) at 7.3 g/t gold equivalent.
They said the orebody is ideally situated for low-cost, bulk underground mining with access to tidewater to ship concentrate.
The analysts see a future 2,000 tons per day operation producing 136,000 ounces (oz) gold equivalent per year with a $791/oz all-in sustaining cost. The larger Johnson Tract property is ripe with high-quality targets having only re-entered the public domain after 20 years, they added.
The Stifel analysts noted that HighGold (TSX-V:HIGH, OTCQX:HGGOF) has continued to drill since the 2020 inaugural resource at JT Main, extending the footprint by 300 metres (m) along plunge and hitting grades like 19.4 g/t gold equivalent over 4.3m well beyond the resource envelope.
They believe HighGold (TSX-V:HIGH, OTCQX:HGGOF) has already drilled off an additional 291,000 oz gold equivalent and sees runway for another 332,000 oz to be defined with further drilling. Infill drilling is likely to increase the grade of the overall deposit, and the Footwall Copper zone near the root of the system is just starting to be defined.
The exploration company also has a massive land position in the Timmins gold camp containing historic ultra high-grade mines, the Stifel analysts added.
Contact the author at stephen.gunnion@proactiveinvestors.com